How J&J Did an End Run Around the Lawyers in Hip Replacement Recall
Even though complaints about Johnson & Johnson (JNJ)'s hip replacements are piling up at a rate of 5,000 per year, and even though the recall of all its DePuy ASR hips implanted since 2003 -- 93,000 devices worldwide -- could cost the company $1 billion, J&J says it "is not expected to have a material adverse effect on the Company's financial position."
That counter-intuitive statement can be squared away when you look at how J&J is trying to do an end-run around the plaintiffs' attorneys who would normally sue the company on behalf of patients whose "new" hips suddenly need replacing. The company has hired BroadSpire, a case management firm, to contact patients and offer them medical coverage if they need new hips.
On the surface, that sounds like J&J is doing the right thing: Injured patients can get the new hips they need. But it also puts patient care in the hands of doctors on J&J's payroll, not the patient's own doctor, and requires those patients to hand over medical records the company would not normally get a look at unless the patient was represented by an attorney. In some cases, BroadSpire is denying care. In others, some lawyers fear, BroadSpire is asking patients to sign "settlement" papers bringing to an end their right to sue the company.
Normally, when a company is found marketing a defective medical product, lawyers' web sites fill up with information and ads encouraging potential claimants to get in touch. In the case of the DePuy hips, however, those lawyers are now begging patients not to sign any papers with BroadSpire before talking to them first.
This firm, for instance, points out that BroadSpire is contacting as many patients as it can with offers of a case review and potential free care. (Generally, attorneys don't have access to contact information for all patients who received a product, they must advertise to find them.) This firm worries that patients might sign settlement offers from BroadSpire without knowing their full rights. And this firm notes that BroadSpire is only offering to cover patients' out-of-pocket costs, not all the costs, of hip replacement, and that Depuy could use medical files to argue that a hip failed because of the patient's health, not because it was defective.
BroadSpire does appear to be reducing J&J's overall costs. A 56-year-old teacher from Hawaii to Reuters that after Kaiser Permanente refused to pay for a $43,467 double hip replacement, BroadSpire only offered to reimburse the man for the operation after he had paid the fee upfront. Kaiser later reversed its position (and BroadSpire/J&J was saved the cost).
Bonus points: If you noticed that former Depuy CEO David Floyd, who resigned amid the recall, has been rewarded with a new job as CEO of OrthoWorx, a medical device lobbying group in Indiana.
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